Warriors’ “Risk-Free Renewal” Not So Risk-Free?

In the innocent days of last spring, when NBA-lockout talk was nothing more than a source of David Stern fine-threats, teams around the league began a push for season-ticket renewal. With league popularity at an all-time high, there was little difficulty moving the product, but the risk of a lockout-shortened or cancelled season lingered in the background. The NBA addressed this fear by promising fans a to-be-determined rate of interest on their season-ticket investment and refunds should games be cancelled. The Warriors, in a big media push, rolled out what they promoted as an even better deal: “risk-free renewal.” Now that the lockout risk has become a reality, the Warriors’ deal may look less attractive to some fans — those who want their money back for cancelled games.

To be clear from the start, there’s no evidence that the Warriors’ hid any implications of the competing NBA and Warriors ticket packages. They may have made the differences hard to find, artfully talked around them and used other incentives to distract people from them, but they did not hide them. Deep in last year’s renewal fine-print was the following statement: “There shall be no refund of any payments or deposits for tickets or any exchanges of tickets by the Warriors except as determined by the Warriors in their sole discretion; provided, however in the event that home game(s) are missed due to a work stoppage, refunds will be made under the ‘2011-12 Renewal with NBA Interest’ option only.” The logical implication of this statement? If you choose the Warriors’ package over the NBA’s package, there will be no refund — money back in your pocket — for lost games.

When pushed last spring on what the fine print meant, the Warriors rolled out the talking point that “fans will not pay for games that do not happen.” They did not say that Warriors fans will get their money back for lost games — just that they will not pay for them. Again, the logical implication of this statement is that the Warriors will keep your money for the duration of the lockout, then apply to whatever basketball we end up getting this season, the next or some other date in the future.

The upside to the Warriors’ offer is very real for those season-ticket holders that plan to keep their tickets come hell or high-water. The 5% interest offer on prepaid funds is far better than most can do on other investments. But those that opted for the Warriors’ package essentially chose return over liquidity. If angry fans decide between now and whenever basketball starts again that they no longer want to attend games or give their money to the franchise, they’re out of luck. Unlike the NBA option — which would have returned their money — the Warriors will keep it, to be applied to any future Warriors’ purchases.

Right now, with only 2 preseason and 4 regular season home games cancelled, the impact on most fans is purely hypothetical. The Warriors did the right thing yesterday by postponing the final 25% season-ticket payment (it also made sense for the team, saving them from additional interest payments back to fans for games they know are gone). If the NBA manages to piece together a 60-game season, fans will get what they paid for: 75% of a the 2011-12 NBA season. But if the lockout drags on — even to the point of wiping out the season — expect questions to be raised over whether the Warriors gave their fans the better deal (particularly if the 5% interest, like the principle of the investment, is usable only for Warriors’ related purchases).

The moral of the story? Read the fine print, and always expect some sort of risk whenever anything is billed as “risk-free.”